MaxCyte – Electroporation Deep Dive & Outlook for Novel Non-viral Gene Delivery Technologies – 9 September 2021

Some analysts have called MaxCyte “the Illumina of non-viral cell engineering.” In essence, MaxCyte is perceived by some as the critical enabling technology for many of the leading cell therapy companies. Do you agree with that statement?

You noted competition is high for MaxCyte, and they seem to be well-placed today having been a first mover with all the clinical data and FDA master. We’ll dive into this in a bit more detail later in the call, but whilst we’re here, how sustainable or future-proof is MaxCyte’s leading position?

Understood. We’ll circle back to emerging competition in a moment. Before we do, just to provide some context to the call, what are the salient pros and cons of electroporation vs viral transduction? What is the significance of the cell toxicity issue?

Toxicity aside, what are the pros and cons of electroporation vs viral transfection? You mentioned that electroporation may be the go-to technology for CRISPR-Cas gene editing. My understanding is that unlike AAV [adeno-associated virus], LVVs [lentiviral vectors] can accommodate a larger payload, and former executives from Oxford Biomedica note their LVVs can be used for ex-vivo CRISPR-Cas9 editing. What is the use case for electroporation vs LVV mediated transduction?

Do you think the use case for electroporation has been made even stronger following the recent FDA meeting concerning gene therapies? There was a lot of talk around the long-overlooked safety issues associated with empty capsids, referencing your earlier point around having genetic material hanging around in the cells. Do you think this is another feather in electroporation’s cap?

Electroporation as a concept is neither new nor necessarily difficult. How differentiated is MaxCyte’s flow electroporation vs static electroporation, which is what Lonza, Miltenyi and Bio-Rad use for their respective platforms?

My understanding is that when it comes to comparing the Nucleofector vs the GTx in terms of efficiency or cell viability post EP, it really comes down to the specific application in question and how optimised the protocols are to that application. Ultimately, everyone can electroporate, at a large scale, GFP mRNA into a T cell at high efficiency with good viability, but when it comes to some of the more complex or application specific work, there are differences. In your view, which player offers the best off the shelf, or easily customisable, electroporation protocols?

So to confirm, do you think MaxCyte has the best electroporation protocols in place today and is at the forefront of working with customers to improve those protocols and customisation? Is it superior to Lonza in these respects?

To your point, you currently have to use MaxCyte because there are no other alternatives. Should alternatives come to market, let’s say Lonza does get that FDA master file, does have the optimised protocols in place, how significant a threat is that? Worth noting Lonza also has the Cocoon, so has integrated additional workflows, and is also one of the largest CDMOs in the cell therapy space. Otherwise put, once there is technological parity across platforms, would you still use MaxCyte for the commercial manufacturing?

How good is MaxCyte at working with customers to improve protocols for R&D projects vs Lonza? Otherwise put, if a potential customer is looking to develop an entirely new protocol for their application, why go with MaxCyte vs Lonza? Are they generally easier to work with?

I’ve read that whilst the GTx is easy to use, with a fairly simple push-button function, there is a downside in that the instrument parameters cannot be adjusted and existing competitor instruments offer more flexibility in that regard. How much of a disadvantage is that for MaxCyte?

What are the applications for MaxCyte’s platform across research, development and manufacturing? You stress that the GTx is the only option for manufacturing, but in research you noted that you are using Lonza. More broadly, it seems Lonza’s platforms are used a fair bit in non-clinical research for cell therapies. Why is that? Is this mainly a cost issue, the fact the Maxcyte parameters cannot be changed easily, or are there other factors at play here?

To what extent do you want a continuum of products ranging from research to discovery, development and manufacturing from the same product line or family to ensure homogeneity of data? To what extent do you want Lonza to come out with a commercial-scale electroporator coupled with an FDA master file, so that you can use Lonza in research and then in commercial vs having to revalidate on the MaxCyte once you’ve taken the research candidate through the clinic? In essence, I understand that you may not want to adopt the Lonza given it may only offer incremental improvements in cell viability, and you’re looking for a step change, but from a quality of life perspective and data homogeneity perspective, would that move the needle?

FDA master file aside, the sheer quantity and depth of existing clinical data is a greater competitive advantage than Lonza potentially offering a portfolio continuum from research through to development and manufacturing?

Shifting gears to discuss the economics of these instruments, the STx is priced at USD 125,000 and is a capital sale. Consumables range from USD 200-1,500 dependent on the number of cells you want to process. I’ve heard estimates that say each STx brings in around USD 20,000 per year in consumables. If we take the GTx, the instrument is around USD 150,000 per instrument per year, so this is a lease, not a capital sale, for pre-clinical work, and then USD 250,000 for commercial, plus milestones, that translate into royalties once commercialised. To what extent is this milestone and royalty structure a turn-off for potential MaxCyte customers?

There seem to be two potential scenarios. One is that MaxCyte sticks to its guns and that encourages the adoption of alternative technology. The other scenario is that MaxCyte has to capitulate and lower its royalty structure. Which do you think is the most likely option?

If MaxCyte is the technology that ultimately allows a biotech to get to regulatory filing faster via the master file and ultimately get to market faster, to what extent is a couple of million dollars an easy pill to swallow? Do the advantages outweigh the downside of having to pay presumably low-single-digit royalties?

Forgive me for belabouring the point, but we’ve discussed that you wouldn’t adopt a Lonza platform for the development and manufacturing of cell therapies because it can only offer, at best, incremental improvements in terms of efficiency and viability. If the LV does not have such stringent cost structures tied to it, wouldn’t that be incentive enough to switch?

I’d like to circle back to an earlier topic and understand where exactly electroporation fits into the development and manufacturing workflow for cell therapies? By my understanding, EP is far more efficient for knock-out vs knock-in edits, the latter of which are far more important in the context of cell therapy, especially when introducing genes of interest or CARs themselves. By contrast, it seems viral vectors can knock in with higher efficiency than electroporation. What does that mean for the utility or use-case of electroporation? Do you expect that to change any time soon? Could electroporation platforms be able to knock in with high efficiency?

It seems the industry really wants to move away from viral transduction, even in the ex-vivo setting, due to the immunogenicity issues such delivery methods? Forgive me if I am belabouring the point, but do you see someone like MaxCyte looking to optimise their protocols to increase knock-in efficiency? If an electroporation player successfully does so, would that be a major competitive advantage?

I ask because an expert that I’ve spoken to, albeit one who works in the autologous setting, notes he’s been able to achieve 20% knock-in efficiency of a CAR using the Lonza Nucleofector and has not been able to replicate that on any other platform, including MaxCyte. That suggests the Lonza platform is potentially superior than MaxCyte for knock-in edits for ex-vivo autologous cell therapies. That being said, I understand there are caveats to making such claims given what we discussed earlier around protocol optimisation for specific applications. But in your view, is there a potential edge for Lonza for knock-in specifically?

As mentioned earlier, it seems efficiency is comparable across the platforms when the complexity of the edit is low, so for example TRAC or even TCR knock-down. But, as you increase the complexity, so Beta-2M or you want to knock out multiple genes, do we start to see a greater separation in efficiency across the platforms? I understand there’s a negative correlation between efficiency and viability vs payload size or the number of edits, so do start to see more of a separation across the platforms when things get a bit more complicated, or, again, is it simply down to the protocol and how optimised they are for that application?

Despite the fact that you mentioned that Lonza and Maxcyte are similar inn terms of toxicity, viability and function, I’ve heard that MaxCyte is far gentler than competitors while keeping excellent efficiency across a range of cell types. It seems that, at least directionally speaking, MaxCyte is the better option. Is that the case, or should we take such a statement with a pinch of salt?

What about function? Cell viability aside, recent findings suggest that bulk electroporation is toxic to T cell function, ie, the electroporation of human T cells induces gene alterations that decreases the immune activity towards malignant tumours in vivo. When we talk about the T cell function, is one platform gentler or superior to a competing electroporation platform? As a part two to that question, is this impact on cell function a major disadvantage to electroporation more broadly that encourages the adoption of microfluidics based transfection technologies? Squeeze offers a technology which doesn’t impact function as much, as discussed in a previous Forum Interview [see - SQZ Biotechnologies & Microfluidic Transfection – 09 July 2021]

As a quick aside, there was a recent publication in which investigators infused two patients with CAR-T therapies generated using an electroporation device, and the CAR-T cells subsequently became malignant and the patients developed lymphoma. To what extent can that lymphoma be attributed to electroporation?

Shifting gears, I’d like to discuss a bit more about scale. Lonza’s 4D-Nucleofector LV unit allows for the transfection of up to one times 10 to the nine cells. The GTx can transfect 75 thousand to 20 billion cells, MaxCyte’s VLx can, I think, transfect up to 200 billion in under 30 minutes. What are the benefits of such scale? What is the significance of these differences?

Why couldn’t you just transfect a smaller number of cells, ensure they have the correct phenotype, then scale via cell expansion to get to the required number of doses vs trying to transfect 20 billion cells with a VLx upfront? I’m struggling to understand why, from the get go, you want to transfect so many cells, given you can just expand them after the fact?

Based on what I can see publicly, MaxCyte is only working with companies that are exploring haemoglobinopathies or haematological malignancies. Is that a coincidence or is that because it can only really transfect HSCs?

We’ve talked about integration along the bioprocessing workflow. Lonza is looking to integrate their Nucleofector with their Cocoon. Miltenyi has the CliniMacs Prodigy. In essence these players are looking to integrate both electroporation platforms into their downstream expansion systems, which we know is important given you need to expand the cells post electroporation, given the cell viability issues. Is it a disadvantage for MaxCyte to not have its own cell expansion platform? You mentioned it can integrate with the GRex but do you think it will need to expand upstream and downstream to remain competitive?

Tying all the variables together, how sustainable do you think MaxCyte’s first-mover advantage is? How long before competing technologies start eating into its ability to capture additional partnerships?

How innovative would you say MaxCyte is? How good has it been at updating its systems, so the underlying mechanics of its platforms? Otherwise put, are they essentially allowing competitors to narrow the tech delta?

What percentage market share of clinical cell therapy programmes do you think MaxCyte has today?

How significant a threat or opportunity do IPSCs [induced pluripotent stem cells] represent to MaxCyte? My understanding is that IPSC clonal banks act as renewable sources for the generation of cell therapy. Once you have a master human IPSC line, you don’t need further transfection. Fate Therapeutics is starting to demonstrate proof of concept with early clinical data with its IPSC derived Car-NK assets.

What new non-viral gene delivery technologies are you most excited by, and will serve as major competitive threats to MaxCyte and the broader electroporation field?

The Flowfect has high performance, high throughput and impressive scalability. How long before this will be on the market?

If the FDA master file is in place by Q2 2022, how long after that do you think Kytopen will be partnering up with companies, potentially at the expense of MaxCyte partnerships? Would that happen in Q2 2022 or would there be a significant lag?

Can you talk about Draper and its end-to-end bioprocessing platform? They seem to be an interesting one to watch as they have just signed a license agreement with Kite.

Before we wrap up, could I invite you to just give us your closing thoughts as it pertains to MaxCyte and its role within the cell therapy market?